What the U.S.-Iran stalemate means for oil prices
The U.S. and Iran remain in a stalemate as the 60-day negotiation period expires, and access to the Strait of Hormuz remains unclear. Emily Peck, a markets correspondent for Axios, joins with more.
Gas prices in the United States have reached their highest level for August, as peace negotiations between the United States and Iran remain stalled. According to data from AAA, the national average price of gas stands at $4.06 per gallon, a 5 cent increase from last week and a full dollar higher than a year ago. Californians and Hawaiians are paying an average of $5.50 per gallon.
The strait of Hormuz, a vital waterway through which a fifth of the world's oil passes, has been blocked since the start of the US-Israel conflict with Iran in February. Brent crude, the global oil benchmark, hit a record $112 per barrel in March, a level not seen since 2022. Even though prices have since dropped to around $85 per barrel, they are still 30% higher than a year prior.
Gas prices temporarily decreased after brief peace agreements between the US and Iran, but they are now on the rise again due to the ongoing lack of progress in talks. On Monday, the US and Iran missed their 60-day deadline to end the war, failing to reach an agreement on Iran's nuclear program. President Trump has threatened to bomb Oman, a crucial US ally that has historically provided a backchannel for communication between the two nations, should it obstruct the process.
Trump also stated that he is not pressuring for an end to the war without Iran meeting his demands, emphasizing that "I have no time schedule. I'm not in a hurry." Since the start of the six-month conflict, American consumers have spent over $56.4 billion in higher gas prices, or an additional $477 per household, according to the congressional Joint Economic Committee.
Although overall inflation declined in July, consumer prices remain higher than last year. A Harris Poll survey from May found that half of Americans are struggling with the cost of groceries and gas, and the majority believe the US is experiencing an affordability crisis. Meanwhile, oil companies such as Aramco, BP, Shell, Equinor, TotalEnergies, Eni, Chevron, and ExxonMobil have amassed windfall profits of $90 billion during the first quarter since the war began, earning about $700,000 every minute in the March-June period.
Written by urgent.news from The Guardian US's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
